BEIJING (Bloomberg) -- Mercedes-Benz owner Daimler AG, counting on China to provide the most fuel for car demand growth this year, pledged to keep up its investments after the country's biggest stock-market rout since 2007.
"I am still positive subject to some stabilization of the stock market," Hubertus Troska, head of Daimler China, told reporters Monday in Beijing. "I am still confident Daimler will sell significantly more than 300,000 units in China this year."
China's stock prices sunk Monday by the most since 2007, as worsening economic data undermines government support measures.
Daimler will plow ahead by investing more on compact cars in a market where it's been adding dealerships as the automaker expects vehicle ownership levels to rise, according to Troska.
Market tumult has already taken a toll on carmakers, with consumers buying the fewest passenger vehicles in 17 months in July. Steeper discounts offered after the first sales decline in more than two years in June failed to revive demand.
The slump for Chinese equities poses a risk to Mercedes' ability to keep up the pace of sales growth that pushed the brand's sales ahead of BMW AG and Volkswagen AG's Audi in July.
Demand for the C-class sedan and Mercedes compacts boosted China deliveries by 22 percent in the seven months through July, putting the carmaker on track to exceed its annual sales goal in the world's biggest auto market.
Mercedes pulled ahead as its German peers were tripped up by the broader market slump, with Audi's deliveries in July falling 13 percent. BMW posted a 7.4 percent decline, days after saying that China's slowdown may force it to lower this year's profitability goals.
C-Class, GLA
The start of local production for a new long-wheelbase C class late last year has helped insulate Mercedes from the industry slowdown. The automaker also began making the GLA compact SUV in April with partner BAIC Motor.
China this month devalued its currency to combat an economic slowdown, creating a further challenge for German luxury-car makers.
The policy shift reduces the value of the automakers' repatriated earnings from the country and increases the costs of imports. Daimler has said the currency devaluation will have a "slight" effect on profit this year.
